For the market to plunge 1000 or so points and then rebound a good bit of the way back is rattling.
Panic has gripped stock markets worldwide over the Greek debt crisis and the threat of a debt-deflation contagion through banks in Europe (primarily) and the U.S. that own the bonds of Greece, Portugal, Spain, and so forth. If these bond asset prices collapse totally, lending facilities would be badly crimped for both the short and long term.
Faithful readers of my weekly market commentary know that I value the opinion of PIMCO bond manager Bill Gross. Gross has compiled a terrific record as a fixed-income manager, and he regularly proves to be ahead of the curve on issues affecting the global economy.
Fear trumped greed on Wednesday with both the S&P and Dow closing in negative territory. Should you buy the weakness or run for the hills?
Stocks closed sharply lower on Tuesday with investors fearing the debt crisis in Europe could spread and derail the global recovery. Is this the time to be greedy?
The entire premise of the EMU is in question and must be resolved. Either the EU integrates further or dissolves.
With the euro at 1-year lows, these may be the companies that could feel the most pain next earnings season.
Huge moves up in the yield of Greek paper and a growing concern about other EU members and their ability to grow out of large budget deficits has investors thinking twice.